Some Bright Spots Ahead For The Telematics Industry, finds ABI Research

OYSTER BAY, N.Y.--May 2, 20040, 2004--The automotive telematics market has shown a pattern of sluggish, controlled growth in recent years, with marked differences in enthusiasm between world regions, according to the most recent quarterly telematics service from ABI Research.

Why has OEM telematics market growth been lackluster? An absence of meaningful content has been one of the biggest issues, and many providers have been unable to come up with viable business plans that would allow consumers to economically take advantage of automotive-specific services.

The European market has been particularly sluggish, while Asia-Pacific has proved more buoyant, with South Korea and Australia showing great promise in the longer term. Although North America shows great potential, the market there is anything but explosive. At the same time, new developments promise to energize some parts of the sector.

According to Frank Viquez, ABI Research's Director of Automotive Research, retention rates for OEM telematics services in luxury vehicle lines are pronouncedly higher than in lower vehicle segments. "OEMs are still waiting to break into the telematics mass market, yet they still haven't been able to offer meaningful content at a reasonable price point to the general consumer," he says.

Viquez adds that OEMs already possess many of the tools they need to help solve the issue. He notes that one way out of this box may be to layer ancillary services tied in through the use of the latest technologies from the consumer electronics aftermarket. For example, data services via satellite radio broadcasters such as XM and Sirius providing continuous updates of traffic and other travel conditions will be commercially introduced by the end of the year. Depending on how the service is marketed, the potential exists to help kick-start a hindered market.

The research concludes that additional opportunities lie in enabling the integration of a user's mobile handset or PDA with onboard telematics hardware. ABI Research cautions that this approach requires special considerations, as OEMs may face some difficulties in marketing potentially analogous services that are, or will soon be, available through a wireless carrier via GPS-enabled handsets.

ABI Research's OEM Telematics Quarterly Service provides timely market information on the OEM Telematics industry and explores the factors driving and hampering the market. The service examines and provides insight into the global trends in telematics hardware, services, and technologies, along with the latest market developments and business issues facing industry players.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the web at www.abiresearch.com, or by calling 516.624.3113.